February 12, 2015 | Grain Hedge Insights | Cody Bills | Views: 159

Are Export Sales Strong Enough To Lift the Grains?

This morning’s export sales were strong, but are they strong enough to get grain prices moving higher again?

In the overnight session corn is trading ¾ of a cent lower, soybeans are trading 2 ½ cents higher and wheat is trading lower ¾ of a cent lower going into the morning pause.


Corn export sales beat analyst expectations by increasing 19 percent week over week and booking 1,003,100 metric tons. This week’s sales were well above the 600,000-800,000 metric tons expected by the market. Soybeans also had a fantastic week booking 745,400 metric tons which is up 52 percent from last week and nearly double the 250,000-450,000 metric tons expected by the market. Soybean sales are still well ahead of pace even after accounting for the 20 million bushel increase in the February WASDE report. Wheat sales improved only 3 percent over last week with a weekly total of 409,300 metric tons compared to expectations of 300,000-500,000 metric tons.


                                Expectations               Actual

Corn                       600,000-850,000           1,003,100

Soybeans                 250,000-450,000              745,400

Wheat                    300,000-500,000              409,300


Weekly ethanol production increased 13,000 barrels per day to 961,000 BPD even as weekly ethanol stocks rise again. This week stocks grew 149,000 barrels to 21.14 million barrels. Ethanol production continues to run 5.6 percent ahead of last year’s production pace. In the February WASDE report the USDA increased their corn used for ethanol forecast by 75 million bushels, lifting their ethanol production forecast from .8 percent increase over last year to 2.3 percent.  


The Rosario Grain Exchange lifted its forecast for corn and soybean production forecast for Argentina significantly in their latest report. Corn production was raised to 23.5 million metric tons compared to their last forecast of 22.4 MMT. Soybean production was increased to 58 million metric tons from 54.5 MMT. Both estimates were higher than the February WASDE report which estimated Argentina corn production at 23 MMT and soybean production at 56 MMT.


The Brazilian government’s crop supply agency Conab cut its corn and soybean production estimates for Brazil in a recently released report. Corn production was lowered to 78.4 MMT from 79.1 MMT in January. Soybean production was lowered to 94.6 MMT from 95.9 MMT. 

February 11, 2015 | Grain Hedge Insights | Cody Bills | Views: 198

Soybeans Trade Higher

Tune in to hear Cody and Kevin discuss whether the shift in soybeans was a fundamental shift. They will also break down the weekly ethanol report and South American Production numbers.

February 11, 2015 | Grain Hedge Insights | Cody Bills | Views: 174

Grain Market Continues Lower Following Tuesday Reports

The grains finished the evening session off weaker after USDA cuts corn and soybean ending stocks in yesterday’s WASDE report.

In the overnight session the grains continued lower with corn down 2 ½ cents, soybeans down 2 cents and wheat down 5 cents going into this morning’s pause in trading. Crude oil is also trading lower and the U.S. dollar is up a fraction of a percent.


Yesterday’s WASDE report provided a small surprises for the market with both corn and soybean ending stocks revised lower, but funds responded to the news by selling 7,000 contracts of corn, 7,000 contracts of soybeans and 6,000 contracts of wheat. Traders will begin to turn their attention toward spring planted acreage expectations and continue to focus on South American production.


Yesterday, Corn ending stocks were revised 50 million bushels lower from January’s report to 1.827 billion bushels. The current stocks to use ratio is now 13.38 percent. The adjustments to the balance sheet were primarily made up of an increase in corn used for ethanol by 75 million bushels. Ethanol production has been running well ahead of pace increasing 5.6 percent year over year compared January WASDE expectations of a .8 percent increase.


Soybean ending stocks declined 25 million bushels from the January report to 385 million bushels. Both export sales and crushings increased in February’s by 20 million bushels and 15 million bushels respectively.


U.S. wheat ending stocks increased 5 million bushels to 692 million bushels which was slightly more than analysts expected. Export sales were revised lower by 25 million bushels which was mostly offset by a 20 million bushel decline in imports. Global wheat stocks also increased to 197.85 million metric tons, compared to expectations of 195.83 MMT.


Also in the news this morning is talks that Egypt is negotiating with Russia to be exempted from the wheat export tariffs that Russia established early this year. 

February 10, 2015 | Grain Hedge Insights | Cody Bills | Views: 178

Export Numbers Out Today

Cody and Kevin talk about what producers and traders should do following the export sales and production numbers.

February 10, 2015 | Grain Hedge Insights | Cody Bills | Views: 218

What Surprise will the February USDA Report Hold?

Here are the analyst expectations for the February WASDE report and what traders will be paying close attention to.

In the overnight session the grains turned negative with corn down 1 ½ cents, soybeans down 2 ¼ cents and wheat down 3 ½ cents on the week. The dollar index is trading higher this morning and crude oil is trading slightly lower. This morning at 11 AM CST the USDA will release their February Supply and Demand report.  


Analysts are expecting a 2 million bushel increase to both corn and wheat ending stocks, while soybean ending stocks are expected to decline 12 million bushels to 398 MBU carryout. Soybean export sales continue to run well ahead of pace, building traders’ expectations that the USDA will revise export sales higher in this month’s report. Looking at the last five February WASDE reports we have seen the USDA revise ending stocks on average 56 bushels lower for corn and 9 bushels lower for soybeans.


South America will be highly focused on this report as harvest begins to pick up pace in the southern hemisphere. Some traders believe that revisions in Brazil and Argentina production will occur in next month’s WASDE report with such little harvest data available at this time. However, January was an exceptionally dry month for the northern part of Brazil providing 40 percent less moisture than normal over the last 30 days. With the precipitation significantly less than normal it is likely we see at least a minor revision in production in South America. The average analyst expects Brazil soybean production to be cut to 94.67 million metric tons, and corn production to be cut by nearly a half million metric tons. These production cuts will most likely be offset with increases in Argentina corn and soybean production, with the average analyst expecting 22.54 MMT and 55.58 MMT respectively.


In the overnight session Australia increased their 14/15 wheat crop estimates to 23.61 million metric tons, up from 23.22 million metric tons in December. Texas winter wheat condition also improved this week with 44 percent of the crop rated good-to-excellent up from 42 percent a week before.    

February 09, 2015 | Grain Hedge Insights | Cody Bills | Views: 181

Grains Trade Slightly Higher

Today Cody discusses export expectations, ending stock expectations, and South American production. Tune into tomorrow for a break down of the USDA Supply and Demand Report.

February 09, 2015 | Grain Hedge Insights | Cody Bills | Views: 302

USDA Report Expectations

Will tomorrow’s USDA Supply and Demand report move the market? Here are the expectations.

In the overnight session corn soybeans and wheat are all trading slightly lower with corn down 1 ½ cents, soybeans down 1 ¼ cents and wheat down 3 ¼ cents. The U.S. Dollar index and crude oil are both trading higher this morning. Today the market will be positioning for the release of the February 10th USDA Supply and Demand report.


The average analyst guess anticipates an increase in corn and wheat ending stocks. In a Reuters poll of 20 analysts, corn ending stocks was seen increasing two million bushels from the January forecast to 1.879 billion bushels. Wheat ending stocks were seen increasing two million bushels as well to 689 million bushels of carryout. Analysts are expecting a decline in soybean ending stocks by around 12 million bushels to 398 million bushels.


Traders will be focusing on any South American revisions to corn and soybean forecasts as harvest begins to pick up pace in the southern hemisphere. Analysts are expecting both Argentina corn and soybean production to increase by a half million metric tons, while Brazil production is expected to decline. The average analyst guess expects Brazilian soybean production to shed .8 million metric tons from the January forecast due to the dry conditions in the northern part of the growing region. Brazil corn production is also expected to decline .5 MMT to 74.56 million metric tons.


Wheat prices bounced from a low last Monday of $4.92 as a result of a strong macro move in the outside market on Tuesday and talks that Egypt might announce a tender for U.S. wheat as a way to take advantage of a special $100 million dollar credit GASC has at its disposal. Price action on Friday was volatile with some traders getting nervous with no signs of Egyptian buying interest.

February 06, 2015 | Grain Hedge Insights | Cody Bills | Views: 236

Weekly Wrap Up

Tune in for a review of Tuesday's rally and hear Cody break down nationwide basis changes.

February 06, 2015 | Grain Hedge Insights | Cody Bills | Views: 236

Weekly Cash Comments

Weekly Market Wrap Up February 06, 2015

Grain basis was mostly stronger on the week even with futures prices trying to rebound off of recent lows. For the week ending February 5, spot corn basis was up 1 cent a bushel while spot bean bids advanced 2 cents on the week.


For corn, the action in basis continues be mostly playing out along river terminals. A combination of strong export sales and falling barge freight have helped keep basis levels moving higher at river markets in recent weeks, and this week saw average spot basis at river terminals jumping 5 cents a bushel. For ethanol plants, basis levels as a group were on par with the US average posting a modest 1-cent advance. Ethanol production for the week was down 30,000 barrels per day bringing the weekly average to 948,000 barrels per day. Ethanol stocks climbed again this week by 355,000 barrels to 20.99 million barrels.


In soybeans, export business has begun to take a down turn as China buying has dried up. River terminals were fractionally lower this week pressured by a 6-cent loss at the Gulf export market. For crushing plants, basis levels actually improved 3 cents a bushel as farmer selling has all but dried up in the past 6 weeks thanks to the slide in futures prices.


New-Crop 2015 Average Basis by State  

                                     CORN                                              SOYBEANS
State           Avg    WeeklyChange    YearlyChange    Avg        WeeklyChange    YearlyChange
IA             -43.8          0.1                 -2.7            -66.2             0.1                 -2.0
IL              -36.6         0.3                 -2.8            -36.0             0.4                -10.2
IN              -31.8         0.4                 -1.1            -35.0            -0.1                 -2.6
KS             -29.6          0.2                  0.2            -84.7            -0.1                 -5.4

MI             -50.8          0.6                  0.6            -59.7             0.0                   6.3
MN            -52.9          0.2                 -2.1            -68.4             0.4                  -2.1
MO           -43.4           0.4                 -9.1            -57.6            -0.1                -11.6

ND           -73.7            0.3                 -6.5            -98.4             0.0                -14.2
NE           -45.7            0.7                 -5.9            -77.8             0.5                  -5.2
OH           -39.3            0.5                -1.4            -46.4              0.0                   0.8
OK           -12.8            0.8                  6.8            -84.8              0.0                -14.0

SD            -70.8            0.1               -11.7            -81.8              0.6                 -3.4
WI            -42.1            0.3                -1.1             -59.4              0.2                  0.5

February 06, 2015 | Grain Hedge Insights | Cody Bills | Views: 250

Grains were higher in the Overnight

Wheat led the advance while corn and soybeans also came in higher.

Grains were higher overnight led by wheat which posted a 5-cent advance; corn was up 2 while soybeans came in 3-cents higher.


Wheat has found continued support thanks to news Egypt’s GASC may be in the market for US-only SRW wheat. However, the decision to buy US-only wheat may not be strictly a result of better prices. Instead, Mamdouh Abdel Fattah, vice chairman of the General Authority for Supply Commodities (GASC), said Egypt has a special $100 million credit line the United States made available to the Egyptian government in recent years for purchases of U.S. wheat. He went on to suggest "This has been an option for us for some time, so if the prices are right and we feel the need to use that to buy U.S. wheat, we will.”  Overall, however, US export business remains slow. Thursday’s weekly US sales report showed only 397,000 MT. On Thursday, EU showed a record high week of 1.674 MMT, besting the previous record in 2010 of 1.03 MT


For beans, the Buenos Aires Grains Exchange said on Thursday that Argentina should produce a record-high soybean crop in the 2014/15 season of 57 MMT, giving its first harvest forecast for this crop year. That estimate is quite a bit higher than the latest USDA forecast of 55 MMT.


In the corn market, Thursday’s export sales were at the low end of expectations but still coming in relatively strong at 844,900 MT this week. Although sales slowed from last week, corn bookings are still running 2.6 MMT ahead of pace to meet the USDA’s expectations. At the National Cattlemen's Beef Association conference in San Antonio, Texas, meteorologist Art Douglas, a professor emeritus in the Dept of Atmospheric Sciences at Creighton University, says cool weather will likely delay U.S. crop planting in the spring. He says the U.S. will go through US corn pollination with cool weather and then temps will heat up in August.  At the same conference, CattleFax projects this year's U.S. corn yield will be in the low 160s, with production of around 13.3-13.5 billion bushels.

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